An Empirical Investigation of Users’ Views on Corporate Annual Reports in Developing Countries: Evidence from Kuwait

Abstract

Purpose - This study is the first attempt to explore in depth users' views on corporate annual reports in Qatar, which has a rapidly growing economy and underdeveloped accounting systems. Design/methodology/approach - A questionnaire was distributed to 80 individual investors, 40 institutional investors, 30 financial analysts, 30 hank credit officers and 40 government officers who are involved with investment decisions. A total of 150 completed questionnaires were returned giving a response rate of 68 percent. Descriptive statistics and Kruskal-Wallis and Mann Whitney tests were used to analyze the results. Findings - The respondents considered annual reports to be important and useful and to be the main source of information for investment decisions. The respondents rated the balance sheet, auditor's report, cash flow statement, income statement and notes to the accounts as the most important and understandable sections in the annual reports. Additionally, respondents considered government publications and newspapers, magazines and journals to be very important sources of up to date, useful and easy to access information. Respondents differed significantly in their perceptions about the importance of the cash flow section, the use of accounting information for monitoring investment decisions and the use of other available sources of information. Research limitations/Implications - Findings reported in the paper reveal the need for research into the reasons for such differences and also may help accounting association bodies in Qatar to play an active role in improving users' awareness of the importance and usefulness of corporate annual reports when making investment decisions. Originality/value - This project explores what sections of the corporate annual reports are most important to the users in the state of Qatar which has unique attributes in terms of its economic and accounting developments. Several findings are particularly relevant for preparers of corporate annual reports in this unique developing country. Although several studies investigated this issue in developing countries such as the Kuwait, Saudi Arabia, Bahrain, Jordan and Iran, the findings of these studies might not be generalized on Qatar. [ABSTRACT FROM AUTHOR]